* U.S. picks up one cargo, Israel at least 4
* Baghdad has threatened to sue companies doing trade
* Trieste, Italy previously main destination
By Julia Payne and Ron Bousso
LONDON, May 15 Israeli and U.S. oil refineries
have joined the growing list of customers for crude from Iraqi
Kurdistan, a region locked in a bitter struggle with the central
government in Baghdad that says the sales are illegal.
The United States imported its first crude cargo from the
region two weeks ago while at least four have gone to Israel
since January, ship tracking and industry sources said, after
two were shipped there last summer.
The Iraqi government has repeatedly said oil sales
by-passing Baghdad are illegal and has threatened to sue any
company involved in the trade, yet Kurdish crude and light
condensate oil has been sold to several European buyers. Baghdad
refuses to sell oil to Israel, echoing other Arab states.
Israel's Energy Ministry declined to comment, saying that it
does not discuss the country's sources of oil.
A senior Iraqi oil ministry official said Baghdad had no
information on the sales but was investigating.
"If these reports are correct, then dire consequences will
be inevitable," the Iraqi oil official said.
"This is a seriously dangerous development. We have always
warned the region to stop smuggling Iraqi crude by trucks to
Turkey...and now if this is proved true then they are going too
An official of Kurdistan's Ministry of Natural Resources
said from the region's capital Arbil: "The Kurdish Regional
Government (KRG) has not sold crude directly or indirectly to
The stakes are high as Kurdistan's independent oil sales
allow it to receive income outside Baghdad's budget, pushing it
towards even greater autonomy.
Tensions reached a new pitch this week after Kurdistan's
president said Iraq had been led in an authoritarian direction
by Prime Minister Nuri al-Maliki and threatened to end the
region's participation in the federal government.
The deals involve major international commodity traders,
including Trafigura, one of the top three oil traders in the
world, trading and shipping sources said.
A spokeswoman for Trafigura declined to comment.
The sales come as the KRG and Baghdad aim to complete
long-running negotiations over a pipeline Arbil built to Turkey
to circumvent the central government monopoly.
Arbil began pumping crude through to the Turkish port of
Ceyhan on the Mediterranean in January but stopped short of
selling it, under the threat of budget cuts from Baghdad.
Storage tanks are now nearly full with 2.4 million barrels,
trading and shipping sources close to the matter said. Exports
of this oil could start as early as later this month.
Iraqi Kurdistan began selling its oil independently of the
federal government in 2012 with a small trickle of condensate
trucked through Turkey, followed by two types of crude oil.
Baghdad says only its state oil company is authorised to
sell Iraqi crude, but both sides claim the constitution is on
their side and with a crucial hydrocarbon law stuck in draft
mode, there is room to manoeuvre.
A Turkish company called Powertrans is the broker for the
Kurdish government, selling the oil via tenders to traders. Much
of the crude has gone to Trieste, Italy while the condensate has
gone to France, Germany, the Netherlands and even Latin America.
The tanker Marinoula discharged around 265,000 barrels of
heavy sour Iraqi Shaikan crude oil at the Oiltanking terminal in
Houston on May 1, shipping sources said and Reuters AIS Live
ship tracking showed.
The identity of the buyer was unclear as the terminal is
connected to 23 refining, production and storage facilities
scattered between the Gulf Coast and Cushing, Oklahoma.
The crude was loaded by trading company Petraco at the Delta
Rubis terminal at Dortyol in Turkey, one of two ports that
export Kurdish oil, the sources said. The company declined to
At least four cargoes laden with Kurdish crude went to
Israel since the start of this year. Trading sources said that
Israel's Oil Refineries Limited's (ORL) plant at Haifa ran some
Paz Oil Company, owner of a refinery near Ashdod, bought at
least two cargoes within the last 9 months, traders said.
A spokesman for ORL said "ORL purchases its crude oil from
different sources in accordance with the refinery's needs and
A spokeswoman for Paz denied the plant had used Kurdish
Some Kurdish oil has also been simply stored, sources said.
Geneva-based trading company Mocoh lifted Shaikan crude from
Dortyol in Turkey on the Baltic Commodore, which arrived in
Ashkelon in Israel on Jan. 31, market sources and ship-tracking
An official at the company said that "Israeli refineries are
not necessarily using this crude," but declined to elaborate.
Trafigura sent a cargo of Kurdish crude to Israel on the
Hope A tanker, which went first to Ashkelon and then to Haifa
between Feb 10-15.
The Kriti Jade loaded Kurdish crude in Turkey and then
sailed to Ashkelon on March 3 and then Haifa a few days later,
the sources and ship-tracking showed.
The second tanker, Kriti Sea, picked up Kurdish oil around
March 5. The vessel then anchored off Limassol, Cyprus but did
not discharge crude. Petraco lifted both cargoes.
Instead it left still laden and tracking was switched off
between May 17-20 near the Israeli coast. When it reappeared,
still close to Israel, the tanker was empty.
(Additional reporting by Steven Sheer in Jerusalem, Ahmed
Rasheed in Baghdad, Isabel Coles in Arbil and David Sheppard in
London, editing by William Hardy)